Japan’s services sector sentiment index rose to 46.4 in August 2026 from 45.7 in July, marking its highest level since February and slightly exceeding market expectations of 46.3. This was the fourth consecutive monthly improvement, driven by stronger sentiment among household-related businesses, even as confidence in the food and beverage sector weakened.
Corporate confidence also strengthened, led primarily by gains in the non-manufacturing sector, while labor market conditions continued to improve. Meanwhile, the economic outlook index, which gauges business expectations for the coming months, climbed to 48.3 in August from 45.8 in July, reaching a six-month high and posting its fourth straight monthly increase. The data indicate that businesses expect further recovery in economic conditions despite ongoing concerns about the impact of natural disasters.
